For a statement to be true, each part must be true. One detail can make an entire statement false. Write T if the statement is true. If the statement is false, write F 1.) Receiving cash in advance from a customer for services to be provided in the future causes assets to increase to increase and stockholders’ equity to increase. 2.) Expenses have the effect of decreasi

For a statement to be true, each part must be true. One detail can make an entire statement false. Write T if the statement is true. If the statement is false, write F 1.) Receiving cash in advance from a customer for services to be provided in the future causes assets to increase to increase and stockholders’ equity to increase. 2.) Expenses have the effect of decreasi

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter2: T Accounts, Debits And Credits, Trial Balance, And Financial Statements

Section: Chapter Questions

Problem 3QY

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For each of the following items, indicate whether a debit or a credit applies. A. increase in retained earnings B. decrease in prepaid rent C. increase in dividends D. decrease in salaries payable E. increase in accounts receivable F. decrease in common stock G. decrease in prepaid insurance H. decrease in advertising expense I. decrease in unearned service fees J. increase in office equipment
Suzanne knows that an increase to an expense reduces retained earnings (a stockholders’ equity account). However, she also knows that expense accounts have a debit balance, while retained earnings normally has a credit balance. Are these two pieces of information consistent? Explain.
For a statement to be true, each part must be true. One detail can make an entire statement false. Write T if the statement is true. If the statement is false, write F. 1.) Borrowing cash from the bank causes assets to increase and liabilities to increase.2.) Providing services to customers for cash causes stockholders’ equity to increase.
When an account payable is paid with cash, the owner's equity in the business decreases. Please explain with full explanation a. True b. False
Services are provided for customers who are sent bills for the amount they owe. For thistransaction, identify the effect on the accounting equation.a. Assets increase and liabilities increase.b. Assets increase and stockholders’ equity increases.c. Liabilities increase and stockholders’ equity decreases.d. Liabilities decrease and assets decrease.
Blecker Corp. made cash sales to customers. What effect does this transaction have on theaccounting equation?a. Liabilities increase and stockholders’ equity increases.b. There is no effect on the accounting equation as one asset account increases whileanother asset account decreases.c. Assets increase and liabilities increase.d. Assets increase and stockholders’ equity increases.
1. Which of the following statements is FALSE?A. Cash includes coins, bills and checks.B. Prepaid expenses are advance payments to cover future expenses such as rent expense.C. Cash is the most liquid asset.D. Current assets are always reasonably expected to be realized in cash or consumed in the business after twelve months from the reporting date.2. Which of the following statements is FALSE?A. Increase in withdrawal is debited.B. Expense is a temporary account.C. Withdrawals made by the owner during a particular accounting period increases owner's equity.D. Revenue is a major account.
A credit is used to record an increase in all of the following accounts exceptA. Utility Expense.B. Share Capital.C. Accounts Payable.D. Service Revenue.2. Generally, all of the following financial statements can be prepared with informationfrom the trial balance exceptA. Income Statement.B. Statement of Cash Flows.C. Statement of Retained Earnings.D. Statement of Financial Position.3. The Dividends account is increased with a debit because dividendsA. are an expense.B. are declared an asset.C. reduce liabilities.D.result in a decrease in equity, so debiting Dividends would have the effect ofdecreasing Equity.4. When a company pays cash for a truck, what is the effect on the accounting equationfor that company?A. Increase assets and increase liabilities.B. Decrease assets and decrease liabilities.C. Increase assets and increase equity.D. No net change.5. Gordon Company was recently formed with a $5,000 investment in the company byshareholders. The company then borrowed $2,000 from a…
Which of the following causes the accounting equation not to balance? a. Increase assets; increase liabilities. b. Decrease assets; increase expenses. c. Increase assets; increase dividends. d. Decrease liabilities; increase revenues.
Which of the following transactions causes a decrease in total assets (more than one may be correct)? Multiple correct question a) Issue common stock in exchange for cash. b) Purchase office equipment for cash. c) Pay dividends to stockholders. d) Pay employee salaries for the current month.
Identify if it will Increase, Decrease or No effect. 1.What happens to the owner’s assets when the company receives cash from a bank loan? 2.What happens to the owner’s equity when the company receives cash? 3.What happens to the owner’s equity when the owner invests personal cash in the business? 4.What will happen to the company’s liquidity when some of its products are sold from inventory? 5.What happens to the owner’s assets when the company purchases equipment with its cash? 6.What happens to the owner’s assets when the company repays the bank that had lent?
A) The computer is the only tool needed in monitoring a business's financial condition. True or False B) Retained earnings are the same as cash. True or false C) The income statement shows the financial condition of a business over a period of time. True or false